Start-up accelerator muru-D is taking on a cohort of 'more mature' companies following a change to its funding model.
The Telstra-backed accelerator switched to a Simple Agreement for Future Equity (SAFE) model in November, meaning founders do not have to give up a specific percentage of their company at the time of investment.
Previously muru-D invested up to $40,000 in each startup during the program in return for a small equity stake which valued each company at around $1 million. Now, a company’s valuation and muru-D’s equity is determined at a later date based on how investors value the company in the future.
The model was pioneered by the Silicon Valley seed accelerator Y Combinator – which has backed the likes of Dropbox, Airbnb, Coinbase, Stripe and Reddit – and has been adapted for the Australian market.
“This gives muru-D more flexibility and stronger startups a better deal. Following the program, companies raise at the best valuation they can achieve in the market,” the Sydney-based accelerator said.
This more flexible method of investment also makes muru-D more attractive to later stage companies and more ambitious founders, according to the accelerator.
The fourth group of start-ups, whittled down from 150 applicants, joined the #SYD4 program this week.
“We actively hunted for more mature companies, who traditionally would be less likely to consider an accelerator. We travelled around Australia to visit universities and co-working spaces, and also met with venture funds and leading startups to help source these companies,” said muru-D entrepreneur-in-residence, Ben Sand.
“This cohort demonstrates a depth of experience, innovation and global ambition that is a level above anything we have seen before – in line with muru-D’s vision to keep evolving the program and attract the best talent,” he added.
A number of the eight start-ups already have a solid customer base. AgriWebb is an end-to-end farm management software used by more than 800 farmers locally. GeoInteractive has built a hardware product similar to GoPro that delivers an underground map like Google Street View, and is currently being used by Sydney Water, coal miner Peabody Energy and minerals miner South32.
Other companies include consumer-facing blockchain product developer Bron.tech, real-time patient monitoring device company Patch’d and Flurosat, which mounts hyperspectral cameras on drones and nano satellites to allow farmers to monitor crop health.
Since it was established in 2013, muru-D – which has bases in Sydney and Singapore plus partner programs in Brisbane and Perth – has worked with 44 start-ups of which 41 are still operational. Those start-ups have collectively generated almost $8m in revenue and created 269 jobs, muru-D said.